A Look At The Dogecoin Chart As The Good Boi Heads Into The Weekend

Dogecoin DOGE/USD was trading flat on Friday after three bullish 24-hour trading sessions saw the crypto bounce 12% higher off a low of $0.0574 to reach a high of $0.064.

Despite the rebound, Dogecoin is trading in what may be confirmed as a downtrend over the coming days: on July 11, the crypto fell below the $0.062 mark, which negated its uptrend.

A downtrend occurs when a stock consistently makes a series of lower lows and lower highs on the chart.

The lower lows indicate the bears are in control, while the intermittent lower highs indicate consolidation periods.

Traders can use moving averages to help identify a downtrend with descending lower timeframe moving averages (such as the eight-day or 21-day exponential moving averages) indicating the stock is in a steep shorter-term downtrend.

Descending longer-term moving averages (such as the 200-day simple moving average) indicate a long-term downtrend.

A stock often signals when the lower low is in by printing a reversal candlestick such as a doji, bullish engulfing or hammer candlestick. Likewise, the lower high could be signaled when a doji, gravestone or dragonfly candlestick is printed. Moreover, the lower lows and lower highs often take place at resistance and support levels.

In a downtrend, the "trend is your friend" until it’s not, and in a downtrend, there are ways for both bullish and bearish traders to participate in the stock:

• Bearish traders who are already holding a position in a stock can feel confident the downtrend will continue unless the stock makes a higher high. Traders looking to take a position in a stock trading in a downtrend can usually find the safest entry on the lower high.
• Bullish traders can enter the trade on the lower low and exit on the lower high. These traders can also enter when the downtrend breaks and the stock makes a higher high, indicating a reversal into an uptrend may be in the cards.

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The Dogecoin Chart: The high-of-day on Friday may serve as the higher low if Dogecoin falls below the $0.057 level over the coming trading sessions. There is also a chance the recent rebound, paired with a steep decline between July 10 and July 12, is a bear flag. If the bear flag becomes the dominant pattern, the measured move is about 15%, which suggests Dogecoin could fall toward about $0.054.

• Bullish traders want to see Dogecoin regain the eight-day exponential moving average as support, which will negate the bear flag. If Dogecoin is able to regain that level and the 21-day EMA, which is trending slightly above the eight-day, the eight-day EMA will cross above the 21-day and give bulls more confidence going forward.
• Bullish traders would also prefer to see Dogecoin close the trading day near its high-of-day price, which would cause the crypto to print a bullish Marubozu candlestick and indicate higher prices were likely in the cards for Saturday. If the crypto closes the trading session near to flat, it will print a shooting star candlestick, which could indicate a reversal to the downside is in the cards.
• Dogecoin’s trading volume on Friday was measuring in below average, which indicates a period of consolidation and leans neither bullish nor bearish. At the time of writing, Dogecoin’s volume was coming in at about 176 million on Coinbase compared to the 10-day average of 188.86 million.
• Dogecoin has resistance above at $0.065 and $0.083 and support below at $0.062 and 5 cents.

See Also: DOGE Daily: Market Goes Green, 'Dogecoin Millionaire' Names 4 Coins That Can See Upside